Charging for Discovery – The Problem With Free Discovery Calls

The problem with ‘free’ is that it doesn’t generally pay many bills.

Running an agency costs money (assuming your team doesn’t work purely for the love of it, expecting no financial reward). Free is a concept that doesn’t tend to sit terribly comfortably alongside bottom lines, running costs, or profitability.

And there’s another thing too.

‘Free’ is a bad valuation to have associated with your agency. What worth do you feel you can offer? If ‘free’ is how you value your own worth, then what message does that convey?

That’s not to say that discovery calls aren’t a vital element of running your business. They’re essential for:

  • Uncovering the client’s issues
  • Identifying the main objectives
  • Establishing expectations and outcomes

Plus, they can help you discover whether there is a market for your product – helping you prevent the #2 most common reason for startup failures.

top reasons why startups fail

Source: HSTK

If you are thorough, the discovery process can take many hours to get done…

…and if later you find out that a potential client changed their mind and decided not to go with you – both your time and your money will have been wasted.

That’s why we at Atarim believe that paid discovery makes a great deal of sense.

In this post, you’ll learn everything about charging for discovery – and how to do it properly.

The 5 Problems With Free Discovery Calls

Here are the 5 main issues with offering free discovery calls. 

#1 – It’s Just Not Perceived as Valuable

If you’re offered something for FREE, people take it for granted.

It’s hard for clients to attach any sort of value to the discovery process, especially when they perceive it as just a series of “meetings”.

In their minds, it’s just another conversation…

In fact, you might experience instances where clients may cancel or postpone discovery meetings, almost to the point where you might feel they’re doing you a favor by responding to your questions. 

#2 – It’s Difficult to Remain Motivated and Invest Enough Time

When you’re doing something for free, it’s obviously not possible to keep yourself motivated throughout the process. There are going to be instances when you’ll feel uninspired, and just run it pro forma.

However, this changes when you get paid for discovery.

You’ll obviously go the extra mile and put your heart into it, which is ultimately what’ll help you determine whether you and the client are a good fit for each other. 

#3 – Doesn’t Help in Screening Bad Clients

You might spend hours on preparing a proposal and running discovery for a potential client. Yet, you’ll later only find that they just weren’t serious from the get-go – and you’ll feel disappointed and frustrated at having wasted tons of time.

Fortunately, you can prevent that by charging for discovery.

Plus it will help you know just how serious your potential clients are – and save you a lot of headaches and wasted hours. If you’re charging clients for discovery, you’ll know just how serious they are. 

#4 – Reduced Profitability

Of course, if you’re not charging for discovery, you can’t make a profit. In fact, it might go the opposite way and only waste your time and money, which will have a negative impact on your profitability.

That’s why we highly suggest charging for discovery.

#5 – Increased Sales Risk

A free discovery is essentially a sales pitch you offer to potential clients.

Based on the discovery, you’re asking them to sign on. Unfortunately, this type of relationship isn’t that strong and can easily break – losing potential clients.

On the other hand, charging for the discovery process creates a transactional relationship.

This type of relationship with your clients is a lot stronger since they have already invested an initial payment – they get their skin in the game. By paying a small amount upfront, clients can get a better understanding of whether working with you would be a good fit in the long run or not. 

In the same way, it’ll give you a better idea too.

building a rapport with a client

The 3 Main Benefits of Charging for Discovery

There are several major benefits that you get when you start charging for discovery. Here are the three that we find the most important.

#1 – Bring Down Your Sales Overhead Expenditure

When you charge for discovery, you’ll reduce the number of working hours for free. This way, your sales overhead allocation is going to reduce immediately.

As you start closing more sales, your ROI will rise while your CAC is going to reduce. 

#2 – Invest in the Discovery Phase

When you’re getting paid for discovery, you’ll prepare documents that are more detailed. 

You’ll be more willing to invest time and money into the discovery phase, all of which will contribute to a better standard of service. 

#3 – Finding the Right Client Fit

Finding the right client fit becomes easier by charging for discovery, especially since both parties will align with the same objectives. 

It’s the best way to screen out bad clients and find those who value your time and services. 

Here’s a simple example: 

If a client has a fairly small budget, they won’t be willing to go with discovery anyway, and you’ll know that it’s not worth pursuing their business in the long run.

finding the right client fit

How to Charge for Discovery

Before you start charging for discovery, you need to provide some sort of justification. 

Ideally, when you’re pricing the project for discovery, you’ll want to charge anywhere between 5-10% of the total value of the project.

This means that if a project is worth $10k, you can charge between $500 – $1000 for the discovery phase.

What If the Project Is Too Small?

Some projects just aren’t big enough for you to charge for discovery in the first place. Ideally, you can charge for discovery if the project costs upwards of $5,000. For smaller projects, you generally won’t have to spend a lot of time during discovery. 

This makes it difficult for you to sell paid discovery in the first place, plus your clients have a limited budget to allocate to discovery.

Therefore, ensure you never start the discovery process unless you have clients sign off on it. Prepare a discovery document and make sure your client confirms it before you start off on the project so that both you and the client can come back to it later on. 

Identifying the Deliverables

When you charge for discovery, your client’s going to expect something in return. 

It’s up to you to educate the client and to explain to them exactly what they’re going to get at the end of the discovery phase. 

Here are the documents that you should offer to your client at the end of discovery.

A Brief about the Company’s Market Position

This is an introductory document that outlines your understanding of the company itself. 

The company brief is a great way to show the client that you understand their major pain points and can help them. 

steps for writing company brief document

Source: SlideTeam

A Detailed Website Analysis

Think of website analysis as a detailed teardown of the client’s website and your analysis of its features. You can add virtually anything you want here, as long as you don’t allocate too many resources to the process. 

detailed website analysis

Source: Hotjar

It’s an excellent way to outline your skills and give the client an idea of what to expect. 

This would include:

  • The sitemap (content, images, functionalities for each page, design inspiration)
  • General functionalities such as integrations for Google Analytics and WordPress plugins
  • A list of third-party licenses that’ll be required to complete the project
  • Any future plugins or addons that will be required for the project

A Marketing Strategy

If you want to go all-out with the discovery plan, include a marketing strategy in there too. 

The marketing plan or strategy is a simple document that includes a list of marketing opportunities that you’ve identified for clients. 

effective marketing strategy

Source: Media Exchange

A Comprehensive Quote

Finally, you’ll also want to include a detailed quote that covers the costs for: 

  • Design
  • Development
  • Deployment 

Make sure to break down the costs in different phases so that clients have a clear idea of what they’re paying for. 

Optimize Your Paid Discovery Process

Since you’re charging clients for delivery, it’s important to focus on optimizing the paid discovery process. There are several things that you can do to make sure that your discovery process offers value to your clients. 

Divide It into Phases

The best thing to do is to divide your discovery process into different phases. 

Atarim helps you create stages and milestones for your projects.

stages and milestones inside Atarim

You can take advantage of that feature, and divide the discovery process into multiple phases – and set deadlines for each phase. This will give the discovery process a structure and will make it more organized. 

► For a detailed guide on doing this easily, check out our video on how to create milestones with Atarim.  

It’s always tempting to let a client know that you’re starting discovery immediately. 

However, in our experience, that’s not always a good idea.

Instead, you should hold off and tell them that you’re going to gather information first. This extra bit of research may prove to be invaluable in the long run, and it also leaves an impression on the client that your services are in high demand.

Prepare a Questionnaire

If you need information about the client’s business to gain a better understanding, using a questionnaire is a great idea.

Atarim allows you to create detailed and appealing discovery forms in seconds.

All you have to do is create a new form, add questions, and share it with clients.

create a discovery form Atarim

To make the most out of the questionnaire, we suggest asking about:

  • Company’s unique selling proposition
  • Major issues they are facing
  • Client’s buyer persona

You can also create Form templates with Atarim that you can re-use with future clients.

use form templates Atarim

Leveraging Atarim eliminates the need to use Google Forms or other 3rd-party software tools, and allows you to centralize all of your information into a single place that everyone involved in a project can access.

Prepare a Discovery Report or Presentation

At the end of the discovery phase, you may want to consider presenting a detailed report or presentation to the client. Think of this as a round-up of everything that you’ve gathered. 

You could share it with the client over a Google Meet or a Zoom call, and it should ideally include the following:

  • Information round-up
  • Recommendations for different marketing strategies
  • An understanding of their buyer persona
  • A summary outlining the scope of the project
  • Comprehensive quote for the work
  • A brief section for Q&A for all attendees

Once you’re done, you can then discuss the next steps with the client. 

If there’s an issue with the budget for the project, now’s the time to discuss it. Make sure you get approvals for each stage of the project before you proceed further. 

Conclusion – Paid Discovery Sets the Tone for the Project

Before you start investing considerable time and resources into any project, it’s important that you run discovery. Smaller agencies may scoff at this or not take it seriously, but it could prove to be a major differentiating factor. 

It can help you uncover hidden issues and establish realistic expectations for your clients.

And we are here to help you with that! 

Atarim can help you create client discovery forms in seconds and divide the discovery (and the whole project!) into milestones and phases. Plus, you can store and organize all discovery material for clients in one place.

And if your clients decide to pursue the project with you, you’ll get even better benefits.

Our tool will allow you to  add tasks with urgency and deadlines so you know precisely what to work on and keep everything organized.

Also, you can leverage our widely praised point-and-click collaboration feature to allow clients to point at what they’re referring to and immediately leave feedback, say what needs to be changed, and so much more. 

If you want to streamline the discovery process, give Atarim a shot for free now.

  • Integrated into the leading visual collaboration platform trusted by 13,000+ agencies (web dev, design, and beyond) worldwide.
  • Supporting project delivery for 1,200,000+ of their clients and stakeholders.
  • Deliver projects in weeks instead of months.

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